'Bad Weather Leaves Food Prices High by 2.3%' - The New Indian Express

'Bad Weather Leaves Food Prices High by 2.3%'

Published: 05th April 2014 06:00 AM

Last Updated: 05th April 2014 01:20 AM

Global food prices were up by 2.3 per cent in March compared with what they were a month ago, United Nations body Food and Agriculture Organisation said in its reports. Poor and unfavourable weather conditions led to crop damage that resulted in global food prices going up.

“Last month’s increase was largely driven by unfavourable weather conditions affecting some crops and geopolitical tensions in the Black Sea region,” FAO said.

Except for dairy products, which fell for the first time in four months, all the other commodity prices registered gains, with sugar and cereals increasing the most, it said.

The cereal price index averaged at 205.8 points in March, up by 5.2 per cent from February, marking the second month of significant increases.

The FAO price index measures monthly price changes for a basket of cereals, oilseeds, dairy products, meat and sugar.

“Last month’s strength stemmed from a surge in wheat and maize prices reflecting a strong pace in grain imports, growing concerns over the effect of continued dryness in the south-central United States on winter wheat crops, and unfavourable weather in parts of Brazil, the FAO said.

However, global rice prices were generally stable. The vegetable oil price index averaged 204.8 points in March, up by 4.5 per cent from February 2014 and the highest level in 18 months.

The rise in the vegetable oil prices mainly reflected a surge in palm oil, on continued concerns over the impact of protracted dry weather in Southeast Asia.

Global sugar prices averaged 253.9 points in March, up by 7.9 per cent from February 2014 as prices kept strengthening amid concerns of declining export availabilities from Brazil and Thailand, due to drought and reduced sugarcane output, respectively.

The likelihood of sugar crops being adversely affected by El Niño later this year also contributed to the price surge, it added.

According to Indian Sugar Mills Association till March 31 this year, a total of 215 lakh tonnes of sugar has been produced in the season 2013-14.  This is about 16 lakh tonnes less than the last year’s sugar production of 231 lakh tonnes during same corresponding period.

ISMA said 330 mills are still crushing sugarcane on March 31, 2014 against 231 mills during the same period last year.

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